Massachusetts Department of Public Utilities Cleans Up Net Metering Regulations

Yesterday, the Massachusetts Department of Public Utilities (DPU) issued an Order, D.P.U. 11-11-E, that addresses several controversies that had arisen out of its Order, D.P.U. 11-11-C, issued last summer. Although the Order in 11-11-E does not go as far as some commenters sought, it is a win for net metering customers and developers relative to the status quo. It allows for more flexible project designs to meet the demands of unique sites, and it clarifies that net metering generation need not be routed through existing meters to comply with the Department’s regulations – an interpretation adopted by at least one utility that had frustrated several net metering projects.

The D.P.U. 11-11-E Order is the latest in a series of efforts to bring clarity to Massachusetts’ net metering policies. In D.P.U. 11-11-C, the Department attempted to clarify its net metering regulations by defining the statutory terms “facility” and “unit”. Significantly, the Department adopted a three part definition of “facility” – “the energy generating equipment associated with a single parcel of land, interconnected with the electric distribution system at a single point, behind a single meter” – and required that each facility meat each criterion. That definition was controversial. It deviated from the established practices of NSTAR and National Grid, resulted in disruption to net metering projects in development, and created new areas of uncertainty and controversy. Yesterday’s Order takes several significant steps towards resolving those uncertainties and controversies.

The Department agreed that a rigid interpretation of its definition of facility could prevent optimal interconnection to the grid for some net metering projects, which for safety or efficiency reasons would be better served by multiple interconnection points and multiple meters. Accordingly, the Department will now allow the distribution companies to grant exceptions to the definition of facility for projects seeking multiple interconnection points/multiple meters where doing so is “the most cost-effective solution with no effect on the electrical safety, electrical reliability, or electrical efficiency of a facility’s interconnection.” This change, which will hopefully be interpreted consistently and transparently by the distribution companies, should avoid forcing project developers and host customers to contort their projects in functionally meaningless, and potentially costly, ways in order to comply with the letter of the Department’s three part definition.

The Department rejected an interpretation of its definition of “facility”, adopted by at least one distribution company, that had required new net metering projects to connect behind existing meters even if there was no engineering rationale for doing so and even if doing so increased the costs of interconnecting the facility. The Department quickly dismissed the encumbering interpretation: “Our adoption of [the single parcel, single interconnection point, single meter] rule for a net metering facility . . . did not impose a new limit on a customer’s interconnection points or points of common coupling for any non-net metering purposes, nor did it prohibit customers from establishing a new point of common coupling at which to interconnect a net metering facility.” The now-rejected interpretation had held up several net metering projects; this Order will prevent future projects from facing the same hurdle.

The Department clarified that a customer may not obtain net metering services for a portion of a generating facility when the total capacity of that facility exceeds the applicable cap for that customer.

Recognizing that a facility’s net metering eligibility should be determined by the distribution company early on in the development process, the Department ordered the distribution companies to file a plan within 30 days of the Order for communicating eligibility to developers as early in the process as possible.

These clarifications, particularly the first two, were necessary to address the unintended consequences of 11-11-C and to provide certainty to project developers and host customers. With this Order, the Department seems to have addressed the most pressing issues raised by 11-11-C, although it remains to be seen how the distribution company administered exception process will play out in practice.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.